Apple May Finally Catch Up In AI: Analyst Sees Big Upside From Perplexity Deal, Smarter Siri, Google Search Rivalry

BofA Securities analyst Wamsi Mohan maintained a Buy rating on Apple Inc AAPL with a price target of $235 on Tuesday.

The rerating reflected strong capital returns, AI leadership and optionality from new products or markets.

Mohan said media articles indicated Apple’s plans to either acquire or forge a partnership with Perplexity AI, which has an answer engine that delivers direct, cited responses to search queries using third-party LLMs.

Also Read: Alibaba Updates LLMs To Power AI On Apple Devices In China

As per the analyst, any such deal would likely be positive for shares, given that Apple is primarily viewed as an AI laggard (amid the delay of deep Siri integration and lack of advanced models). Mohan said that Perplexity AI could address key issues, including quick access to a voice assistant (allegedly better than Siri), and could hedge the risk of having Google as a default search engine.

The analyst said a potential deal could boost Apple’s access to an AI company with AI search and answering capability, talent and AI expertise, product synergies driven by improving Siri and monetizing hardware and services, access to the search advertising market as an alternative to Alphabet‘s Google, and strategic independence on AI. He noted that Apple could also benefit partially by choosing the partnership route.

Mohan projected fiscal 2025 sales of $407.69 billion and EPS of $7.13.

AAPL Price Action: AAPL stock is up 0.65% at $202.82 at publication on Tuesday.

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